publication . Article . Other literature type . 2003

The returns to education: microeconomics

Ian Walker; Hessel Oosterbeek; Colm Harmon;
Open Access
  • Published: 01 Apr 2003
  • Country: Netherlands
In this paper we focus on education as a private decision to invest in "human capital" and the estimation of the rate of return to that private investment. While the literature is replete with studies that estimate the rate of return using regression methods where the estimated return is obtained as the coefficient on a years of education variable in a log wage equation that contains controls for work experience and other individual characteristics, the issue is surrounded with difficulties. We outline the theoretical arguments underpinning the empirical developments and show that the evidence on private returns to the individual is compelling. Despite some of t...
free text keywords: Modified internal rate of return, Holding period return, Rate of return, Investment performance, Economics, Microeconomics, Total return, Absolute return, Return of capital, Return on capital employed
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